Private renters – benefit freeze – gaps of up to £1000 a year between benefit and cheapest rents

Thursday 13 September 2018

A CIH report suggests even the lowest private rents are now out of reach for people on low incomes – putting thousands at increased risk of homelessness.

It showed that more than 90 per cent of Local Housing Allowance (LHA – housing benefit for private renters) rates across Great Britain now fail to cover the cheapest rents, as they were originally designed to do.

LHA rates were frozen for four years in 2016 and CIH is warning that some may be at immediate risk of homelessness, it is asking for immediate intervention by the government.

LHA rates are meant to cover the cheapest 30 per cent of homes in any given area. But they haven’t been increased in line with local rents since April 2013 and they remain frozen until April 2020. As a result, renters across some Broad Rental Market Areas, including Glasgow and Edinburgh are facing gaps of over £10 a week on a single room in a shared home, while tenants with properties of between one to four bedrooms have even larger gaps between LHA rate and rent.

The UK Government introduced targeted affordability funding in 2014 to bridge the biggest gaps, CIH’s report found the impact of that is negligible, covering only a handful of the shortfalls completely.

CIH said the policy is hitting single people aged under 25 particularly hard, because they are only entitled to LHA to cover the rent on a bedroom in a shared home. Even small gaps between their LHA and their rent can be serious because the levels of other benefits they may be entitled to (for example Jobseeker’s Allowance) are also much lower.